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Mainland and Hong Kong signed the fifth protocol to Arrangement for Avoidance of Double Taxation
On 19 July, 2019, Hong Kong and Mainland China signed the Fifth Protocol to the Arrangement for the Avoidance of Double Taxation. This protocol will provide tax relief to qualified Hong Kong and Mainland teachers and researchers, and promote training, talent exchanges and cooperation between the two places. This protocol is anticipated to further drive the development of the Greater Bay Area.
This is particularly interesting for innovative companies that employ researchers for R&D. With this new article, qualified applicants shall be exempt from taxation on the other side for a period of three years, provided that the income is subject to tax on the side where the applicant is employed.
The Arrangement for Avoidance of Double Taxation was initially signed and entered into force by Mainland China and Hong Kong in December 2006. This arrangement defines the taxation liabilities for those who work between China and Hong Kong, thus promotes bilateral trade and investment. The second to the fourth protocol were signed in 2008, 2010, 2015 respectively to further refine specific details of the Arrangement.
Source: HKSAR Press Release